Warning! You are currently not signed in. Any products you have purchased will not be displayed until you Sign In

expected reinsurer deficit (ERD)

A method of testing reinsurance contracts to determine whether there is actual risk transfer. ERD incorporates the present value underwriting loss severity and loss frequency into a single measure. It is the probability (or frequency) of a reinsurer loss multiplied by the loss size itself, calculated over the entire range of loss outcomes. ERD is more robust than simply looking at the 90th percentile outcome because it takes into consideration all loss outcomes (including those beyond the 90th percentile). While such an approach has not replaced the 10/10 Rule in practice, it has been increasingly used in risk transfer evaluations. See also 10/10 Rule.


Links for IRMI Online Subscribers Only: CICR 3/2007


More Risk Finance and Captives Information from IRMI
Books, Manuals, Newsletters IRMI
Online
ReferenceConnect
Risk Financing IRMI Online ReferenceConnect
Captive Insurance Company Reports IRMI Online ReferenceConnect
Captive Practices and Procedures IRMI Online ReferenceConnect
Captives and the Management of Risk IRMI Online ReferenceConnect
The Risk Report IRMI Online ReferenceConnect
Free Risk Financing Articles in IRMI.com
25 Risk-Conquering Ideas
Risk Finance
Captive Insurance
Additional Insured Insurance Law
Insurance Continuing Education Courses from IRMI
Ethics Considerations for P&C Insurance Professionals (CE)
Ethics in the P&C Insurance Workplace (CE)

Navigation

Social Media